Shopping for Individual Health Insurance

Purchasing an Individual Health Plan

The most important thing to know about buying a health plan is that there are two variables you can manipulate to control costs.  The level of benefits (i.e., generosity of coverage, deductible and copays), and the amount of freedom to choose amount physicians and hospitals.

The richer the benefits and the more freedom you want, the more a plan will cost. Buying the lowest cost health plan from a health insurer may not be a wise decision.  Choose a health insurance company that has shown a lot of stability, that is a well known company and is a major provider of health insurance in the States.

Health Plan Basics

How is your health insurance being managed?

When you have a PPO or an HMO Plan, you have a managed care plan.  There is an agreement or contract between the insurance company and the doctor, hospital, or other healthcare provider that belongs to the provider network.  In an HMO, the connection can be very strong, such as having the physicians be salaried employees of the HMO.

In the other cases, the physicians are under contract and agree to be compensated on a capitated rate basis.  In a PPO and Open Access HMO, doctors agree to provide their services to the plan’s members at a lower price in exchange for that health plan encouraging it’s members to use those doctors.  The doctors like it because they get more patients, and the health plan likes it because it saves money.  Consumers like it because it costs less and the benefits are richer.

The different types of managed healthcare plans:

  • PPO Preferred Provider Organization. Employees have the option of using doctors, hospitals, labs and other facilities in the network or outside the network. They receive a higher benefit if they use providers in the network. Employees can refer themselves to a specialist of their choosing.

  • HMO Health Maintenance Organization. Employees receive care from a network of doctors, hospitals, labs and other facilities. If employees access care outside the network of providers, they generally receive no benefit. Some HMOs require a referral from a Primary Care Physician to be seen by a specialist.

  • Primary Care Physician, often referred to as “Gatekeepers”, over see all your care and coordinate referrals to specialists when necessary.  HMO’s are your only choice for comprehensive maternity coverage.